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Undoubtedly, payroll is a critical process for any organization. The pay cycle in the Czech Republic refers to the period for which an organization pays its employees, and this can vary depending on the pay frequency that the organization chooses to adopt.

The payroll cycle in the Czech Republic is monthly, and the employer must set a regular payment date. Salaries must be paid by the end of the calendar month following the month in which the work was completed.

Payroll Cycle Frequency 13th Month Cycle In the Czech Republic, there is no legal requirement to pay a 13th-month salary. However, many employers pay a 13th-month salary bonus, which is typically performance-based.

The minimum wage for 2024 is 112.50 Czech koruna per hour and 18,900 koruna per month.

Generally, overtime must be paid for work in excess of 40 hours per week. Employers may not require more than an average of eight overtime hours in a 26-week period, and 150 hours of overtime in a calendar year.

Employees under the age of 18 should not work overtime. Overtime pay is 125% of the usual wage rate. If worked on a weekend, an employee should be paid 110% of their usual wage rate.

Employers may give extra time off instead of money in exchange for overtime work. In case overtime falls on a holiday, then an employee is entitled to time off as well as wage.

In the Czech Republic, employers must keep records of employees, which should include employees' names, positions, hours worked, wage payments and deductions, and other supporting documents for at least ten years.

Employers should also keep a log of related accidents and deaths as prescribed by the Social Security Administration. They must maintain all documents relating to prior workers' compensation claims for 30 years after the relevant incident.

Tax records must generally be kept for a minimum of three years.

The statute of limitations for retaining health insurance records is five years but may be extended to 10 years in some situations.

An employee is entitled to receive compensatory payment during sickness from the employer for the working days during the first 14 calendar days of sickness. After this period, the employee receives payment from the Social Security system for up to 380 calendar days.

• January 1: Restoration Day of the Independent Czech State
• April 7: Good Friday
• April 10: Easter Monday
• May 1: Labor Day
• May 8: Liberation Day
• July 5: Day of the Slavic Apostles Cyril and Methodius
• July 6: Jan Hus Day
• September 28: St. Wenceslas Day
• October 28: Czechoslovak Independence Day
• November 17: Struggle for Freedom and Democracy Day
• December 24: Christmas Eve
• December 25: Christmas Day
• December 26: St. Stephen's Day

An employee is entitled to receive compensatory payment during sickness from the employer for the working days during the first 14 calendar days of sickness. After this period, the employee receives payment from the Social Security system for up to 380 calendar days.

Expecting mothers are entitled to a leave of 28 weeks (37 weeks in case of multiple births), which can start 8 to 6 weeks prior to the expected date of birth, depending on the mother´s decision. 

The maternity leave pay is fully covered by the social security system.

New fathers are entitled to 7 calendar days of leave, which must be taken during the first 6 weeks following the child´s birth.

The respective pay is fully covered by the social security system.

An employee can take “other leave,” for which the law specifically mentions the conditions of when and to what extent such leave is covered by compensatory pay and when it is unpaid.

• Medical treatment at the medical facility
• Wedding
• Birth of the child
• Death of a family relative
• Civic duty leave

Situations when the employer cannot assign work to an employee for operational or other reasons

When notice of termination is given, the employment relationship will come to an end upon the expiry of the notice period. The notice period must be the same for both the employer and the employee.

The notice period shall be at least 2 months and can be extended only by agreement between the employer and the employee in writing. The notice period shall start to run on the first day of the calendar month following delivery of the notice.

On termination of an employment relationship, an employee whose employment relationship is terminated by notice given by his employer for one of the reasons stipulated by the Labour Code (e.g. the employer's undertaking, or its part, is closed down or relocated, the employee becomes redundant) or by agreement for the same reasons is entitled to receive from the employer severance pay at least in the amount equal to:

• Once his/her average (monthly) earnings where an employment relationship with the employer lasted less than one year
• twice his/her average earnings where an employment relationship with the employer lasted at least one year and less than two years
• triple his/her average earnings where an employment relationship with the employer lasted at least two years.

An employee whose employment relationship is terminated by notice given by his/her employer because the employee is not allowed to perform his current work due to an industrial injury, an occupational disease, or due to threat of occupational disease; or by agreement for the same reasons is entitled to receive severance pay in the amount of at least twelve times his/her average earnings upon termination of the employment relationship.

The Czech Republic issues Employee Cards that allow employees intending to work in the country for more than three months to reside in the country for up to two years, with the option to apply to extend the applicability of the residence period.

An Employee Card also allows its recipient to work in the aspect of employment for which the card was issued. An Employee Card can be applied for at the Ministry of the Interior in the Czech Republic or at a Czech embassy in the foreign national's country of origin.

Employees may also obtain Blue Cards, which are a combination of work permits and residence permits. Blue cards are designated for highly skilled foreign workers, who are working in positions requiring high qualifications for a period of at least one year at wages at least 1.5 times the average gross wage in the Czech Republic.

Employers do not need to apply for employment permits for foreign workers with permanent residency permits or citizens of other EU countries, nor do these employees need to apply for additional work or residency permits.

Private companies cannot conduct background checks other than requiring information from the candidate and recommendations from previous employers. They can, however, ask the candidate to present a criminal record issued by the competent authorities.

The employer must ask the candidate for a medical certificate that ascertains that the candidate is medically fit to be employed since his medical fitness prior to signing the agreement is an issue of the employment agreement’s validity.